The Campaign Spot

Anybody Expect a Lot of Cars Getting Sold Early Next Year?

In the legislation authorizing $14 billion in loans to the auto industry:

(a) DURATION.—The duration of any loan made under this Act shall be 7 years, or such longer period as the President’s designee may determine with respect to such loan.

(b) RATE OF INTEREST; TIMING OF PAYMENTS.—

(1) RATE OF INTEREST.—The annual rate of interest for a loan under this Act shall be—

 (A) 5 percent during the 5-year period beginning on the date on which the President’s designee disburses the loan; and  (B) 9 percent after the end of the period described in subparagraph (A).

 (2) TIMING OF PAYMENTS.—Payments of interest on loans under this Act shall be made semiannually.

So my guess is, Uncle Sam can expect the first missed payment in, oh, June 2009.

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